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<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended MARCH 31, 1996, or
[ ] Transition report pursuant to Section 13 OR 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------------------------
COMMISSION FILE NUMBER 1-13340
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MID ATLANTIC MEDICAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
52-1481661
(IRS Employer Identification Number)
4 TAFT COURT, ROCKVILLE, MARYLAND
(Address of principal executive offices)
20850
(Zip code)
(301) 294-5140
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of
common stock was 46,091,712 shares of common stock, par value $.01,
outstanding as of March 31, 1996.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (Note 1)
(in thousands except share amounts)
<TABLE>
<CAPTION>
(Unaudited) (Note)
March 31, 1996 December 31, 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,503 $ 10,874
Short-term investments 210,601 204,734
Accounts receivable, net of allowance of $3,831 and $3,638 82,202 61,263
Prepaid expenses, advances and other 7,911 8,974
Deferred income taxes 4,001 4,379
----------- -----------
Total current assets 313,218 290,224
Property and equipment, net of accumulated
depreciation of $16,479 and $15,091 41,618 38,704
Statutory deposits 8,556 10,543
Other assets 11,915 11,373
Deferred income taxes 2,304 3,338
---------- -----------
Total assets $ 377,611 $ 354,182
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 60 $ 210
Short-term borrowings 1,470 1,651
Accounts payable 26,065 15,075
Income taxes payable 3,233
Medical claims payable 126,687 108,490
Deferred premium revenue 7,532 10,125
Deferred income taxes 107 1,005
----------- -----------
Total current liabilities 165,154 136,556
Notes payable 181 194
Deferred income taxes 225 216
----------- -----------
Total liabilities 165,560 136,966
----------- -----------
Stockholders' equity (Notes 2 and 3)
Common stock, $.01 par, 100,000,000 shares authorized; 47,136,352 issued
and 46,091,712 outstanding at March 31, 1996; 46,631,327 issued and
46,585,387 outstanding at December 31, 1995 471 466
Additional paid-in capital 46,375 40,374
Treasury stock, 1,044,640 shares at March 31, 1996; 45,940 shares at
December 31, 1995 (22,565) (33)
Unrealized gains on investments, net of tax of $617 and $1,004 1,027 1,535
Retained earnings 186,743 174,874
----------- -----------
Total stockholders' equity 212,051 217,216
----------- -----------
Total liabilities and stockholders' equity $ 377,611 $ 354,182
=========== ===========
/TABLE
<PAGE>
Note: The balance sheet at December 31, 1995 has been extracted from the
audited financial statements at that date.
See accompanying notes to these financial statements.<PAGE>
<PAGE> 3
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands except share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31, March 31,
1996 1995
------------ ------------
<S> <C> <C>
Revenue
Health premium $ 259,595 $ 210,454
Fee and other 3,897 3,843
Life, accidental death and disability premium 655
Home health services 4,625 5,342
Investment 3,023 1,349
----------- -----------
Total revenue 271,795 220,988
----------- -----------
Expense
Medical 220,677 166,496
Life, accidental death and disability claims 290
Home health patient services 3,347 4,217
Administrative (including interest expense of $251 and $317) 28,451 23,011
----------- -----------
Total expense 252,765 193,724
----------- -----------
Income before income taxes 19,030 27,264
Provision for income taxes (7,161) (10,346)
----------- -----------
Net income $ 11,869 $ 16,918
=========== ===========
Income per common and common equivalent share:
Net income $ .25 $ .36
=========== ===========
Weighted average common and common equivalent shares outstanding 48,304,866 47,600,662
=========== ===========
/TABLE
<PAGE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 4
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ending
March 31, 1996
------------
<S> <C> <C>
Cash flows used in operating activities:
Net income $ 11,869
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization $ 1,742
Provision for bad debts 193
Provision for deferred income taxes 123
Loss on sale and disposal of assets 9
Increase in accounts receivable (21,132)
Decrease in prepaid expenses, advances, and other 1,063
Increase in accounts payable 10,990
Increase in medical claims payable 18,197
Decrease in deferred premium revenue (2,593)
Increase in income taxes payable 3,233
-----------
Total adjustments 11,825
-----------
Net cash provided by operating activities 23,694
Cash flows used in investing activities:
Purchases of short-term investments (96,976)
Sales of short-term investments 92,215
Purchases of property and equipment (4,439)
Purchases of statutory deposits (322)
Maturities of statutory deposits 308
Purchases of other assets (52)
Proceeds from sale of assets 71
-----------
Net cash used in investing activities (9,195)
Cash flows used in financing activities:
Principal payments on notes payable (163)
Decrease in short-term borrowings (181)
Exercise of stock options 2,938
Stock option tax benefit 3,068
Purchase of treasury stock (22,532)
-----------
Net cash used in financing activities (16,870)
-----------
Net decrease in cash and cash equivalents (2,371)
Cash and cash equivalents at beginning of period 10,874
-----------
Cash and cash equivalents at end of period $ 8,503
===========
/TABLE
<PAGE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 5
MID ATLANTIC MEDICAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ending
March 31, 1995
------------
<S> <C> <C>
Cash flows used in operating activities:
Net income $ 16,918
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization $ 1,358
Provision for bad debts 23
Provision for deferred income taxes 1,271
Increase in accounts receivable (18,234)
Increase in prepaid expenses, advances, and other (1,077)
Decrease in accounts payable (5,070)
Increase in medical claims payable 3,600
Decrease in deferred premium revenue (3,878)
Increase in income taxes payable 4,311
-----------
Total adjustments (17,696)
-----------
Net cash used in operating activities (778)
Cash flows used in investing activities:
Purchases of short-term investments (81,754)
Sales of short-term investments 70,033
Purchases of property and equipment (1,254)
Purchases of statutory deposits (86)
Maturities of statutory deposits 93
Purchases of other assets (242)
Proceeds from sale of assets 128
-----------
Net cash used in investing activities (13,082)
Cash flows provided by financing activities:
Principal payments on notes payable (151)
Decrease in short-term borrowings (254)
Exercise of stock options 993
Stock option tax benefit 1,458
-----------
Net cash provided by financing activities 2,046
-----------
Net decrease in cash and cash equivalents (11,814)
Cash and cash equivalents at beginning of period 17,054
-----------
Cash and cash equivalents at end of period $ 5,240
===========
/TABLE
<PAGE>
See accompanying notes to these financial statements.<PAGE>
<PAGE> 6
MID ATLANTIC MEDICAL SERVICES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
INTRODUCTION
Mid Atlantic Medical Services, Inc. ("MAMSI") is a holding company whose
subsidiaries are active in managed health care and other life and health
insurance related activities. MAMSI's principal markets currently
include Maryland, Virginia, the District of Columbia, Delaware, West
Virginia, North Carolina and South Carolina. MAMSI and its
subsidiaries (collectively referred to as the "Company") have developed
a broad range of managed health care and related ancillary products and
deliver these services through health maintenance organizations
("HMOs"), preferred provider organizations ("PPOs"), a life and health
insurance company, home health care companies and an outpatient surgery
center.
MAMSI delivers managed health care services principally through HMOs.
The HMOs, MD-Individual Practice Association, Inc. ("M.D. IPA"), Optimum
Choice, Inc. ("OCI") and Optimum Choice of the Carolinas, Inc. ("OCCI"),
arrange for health care services to be provided to a voluntarily
enrolled population for a predetermined, prepaid fee, regardless of the
extent or nature of services provided to the enrollees. The HMOs offer
a full complement of health benefits, including physician, hospital and
prescription drug services.
Other MAMSI subsidiaries include Alliance PPO, Inc., which provides a
PPO delivery network to employers and insurance companies, and Mid
Atlantic Psychiatric Services, Inc., which provides specialized non-risk
mental health services. MAMSI Life and Health Insurance Company
develops and markets indemnity health products in addition to life,
accidental death and disability insurance. HomeCall, Inc., FirstCall,
Inc., and HomeCall Pharmaceutical Services, Inc. provide in-home medical
care including skilled nursing, infusion and therapy to both MAMSI's HMO
members and other payors.
NOTE 1 - FINANCIAL STATEMENTS
The consolidated balance sheet of the Company as of March 31, 1996, the
consolidated statements of operations for the three months ended March
31, 1996 and 1995, and the consolidated statements of cash flows for the
three months ended March 31, 1996 and 1995 have been prepared by MAMSI
without audit. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included.
Certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1995 audited consolidated
financial statements. The results of operations for the period ended
March 31 are not necessarily indicative of the operating results for the
full year.
Certain balances in the 1995 financial statements have been reclassified
to conform to the 1996 presentation.
NOTE 2 - STOCK OPTION PLANS<PAGE>
In 1996, the stockholders of MAMSI ratified the 1996 Non-Qualified Stock
Option Plan whereby options for the purchase of up to 3,000,000 shares
may be granted to officers, employees and non-employee directors of the
Company. Options under this plan are exercisable at 100% of the fair
market value per share on the date the options are granted.<PAGE>
<PAGE> 7
NOTE 3 - COMMON STOCK
The Company has implemented a stock repurchase program under which the
Company may expend up to $60 million (including brokerage commissions)
to repurchase shares of its common stock over a twelve month period. As
of March 31, 1996, the Company has repurchased approximately 1 million
shares for an aggregate purchase price of approximately $22.5 million.<PAGE>
<PAGE> 8
MID ATLANTIC MEDICAL SERVICES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
All forward-looking information contained in this Management's
Discussion and Analysis of Financial Condition and Results of Operations
is based on management's current knowledge of factors affecting MAMSI's
business. MAMSI's actual results may differ materially if these
assumptions prove invalid. Significant risk factors, while not all
inclusive, are:
1. The possibility of increasing price competition in the Company's
market place.
2. The possibility of state or federal budget related mandates that
reduce premiums for Medicaid or Medicare recipients.
3. The potential for increased medical expenses due to:
- Increased utilization by the Company's membership.
- Inflation of costs in the provider community.
- Federal or state mandates that increase benefits.
4. The possibility that the Company is not able to expand its service
territory as planned due to regulatory delays and/or inability to
contract with appropriate providers.
RESULTS OF OPERATIONS
THE THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THE THREE MONTHS
ENDED MARCH 31, 1995
Consolidated net income for the Company was $11,869,000 and $16,918,000
for the first quarter of 1996 and 1995, respectively, a decrease of 30
percent. Earnings per share on net income decreased 31 percent to $.25
in the first quarter of 1996 from $.36 in the first quarter of 1995.
The reduction in earnings is primarily attributable to an increase in
the medical loss ratio due to medical expenses increasing at a greater
rate than premiums because of competition in the marketplace, continuing
losses in the Company's Medicare product, and costs and start-up losses
related to expansion territories, partially offset by an increase in
membership and related revenue and increased investment income from
higher invested balances and realized gains.
Revenue for the three months ended March 31, 1996 increased
approximately $50.8 million or 23 percent over the three months ended
March 31, 1995. A 24 percent increase in net average HMO and indemnity
enrollment resulted in an increase of approximately $49.9 million in
health premium revenue and a less than 1 percent decrease in average
premiums per HMO and indemnity enrollee reduced premium revenue by
approximately $.8 million. Health premiums per member have essentially
remained flat due to the combined effects of an increasing relative
percentage of Medicare risk members with higher per member revenues,
offset by an increasing relative percentage of Virginia Medicaid HMO
members with lower per member revenues, reduced revenues per member in
certain expansion areas, and management's plan to price its commercial
products competitively to accelerate growth in membership. Although<PAGE>
health premiums per member in the current period are comparable to the
prior year period, management does not believe that future periods will
necessarily follow this pattern and that per member revenues on
commercial business may rise slightly over the next twelve months as new
and renewing groups are charged higher than current premium rates due to
legislatively mandated benefit enhancements and pricing changes
initiated by the Company. This is a forward-looking statement. See
"Forward-Looking Information" above for a description of the risk
factors that may affect health premiums per member.
Service revenue from the Company's home health care subsidiaries
contributed $4.6 million in revenue in the first quarter of 1996 as
compared to $5.3 million for the same period in 1995. This reduction is
the result of an increasing relative percentage of business conducted
for MAMSI HMO and indemnity members coupled with the effect of a
positive adjustment to estimated Medicare reimbursement amounts that
increased 1995 revenue. Revenue from life, accidental death and
disability products contributed $.7 million in 1996.<PAGE>
<PAGE> 9
The Company currently has one of the largest HMO and managed care
enrollments in its service area (which includes the entire states of
Maryland and Delaware, the District of Columbia, most counties and
cities in Virginia, and certain areas of West Virginia, North Carolina
and South Carolina), and also the largest network of contract providers
of medical care. Because of the full range of managed care products,
service reputation, strong provider delivery system, trained sales
force, and competitive premiums, management believes that the Company
will continue to increase its membership during the remainder of 1996.
Management's revised goal is to increase membership in all products by a
minimum of 20 percent during 1996. Management's original membership
goal has been reduced due to the expected negative impact of rising
commercial premium rates on sales. This is a forward-looking statement,
and the actual membership may differ from management's current
expectation due to risk factors such as increased competition in the
Company's service area. See "Forward-Looking Information" above for a
description of these risk factors.
In 1993, MAMSI invited the National Committee for Quality Assurance
("NCQA"), a private, non-profit organization, to evaluate the Company's
methodologies in an effort to receive NCQA accreditation. NCQA
accreditation is a voluntary process. The Company did not meet certain
of NCQA's criteria and, therefore, did not receive NCQA accreditation.
MAMSI believes that it has adopted methodologies and programs designed
to respond to concerns and questions raised in NCQA's assessment. The
Company currently believes that, based on its success with large group
sales since the denial of accreditation, the failure to receive NCQA
accreditation has not had a significant adverse effect on its business
or financial condition. The NCQA will be returning to MAMSI in
December, 1996, to begin another review process for accreditation of
MAMSI's HMOs. Although the Company believes that the likelihood of NCQA
accreditation is good, there can be no assurance that accreditation will
be received or that MAMSI will not experience disenrollment if
accreditation is not ultimately received.
Medical expenses as a percentage of health premium revenue ("medical
loss ratio") increased to 85.0 percent for the first three months of
1996 as compared to 79.1 percent for the comparable period of 1995. On
a per member per month basis, medical expenses increased 7 percent to
$108.43 for the first quarter of 1996 as compared to $101.22 for the
same period in 1995. The increase in the medical loss ratio reflects an
increase in overall commercial utilization, continuing high Medicare
member utilization and a higher than historical expense related to the
Virginia Medicaid population. Although medical costs on a per member
per month basis increased significantly in the current period compared
to the prior year, management does not believe that this necessarily
represents a trend. The medical cost factor of total medical costs may
stabilize or only increase slightly from the current level over the next
twelve months due to continuing efforts by the Company to implement
product specific cost containment controls, the adoption of regionalized
and product specific fee maximums for health services, and the
identification and possible termination of certain providers and
specialists from the delivery network following a continuing,
intensified peer review analysis. Additionally, the medical loss ratio
is expected to stabilize or only increase slightly from the current
level over the next twelve months due to the combined effects of an
increasing Medicare membership with lower per member utilization,
increases in commercial health premiums per member, and the continuing<PAGE>
analysis of expansion area and product line profitability. Management
expects Medicare utilization rates to continue to decrease and
eventually attain an acceptable level once membership has grown to
approximately 20,000 members, which certain industry experts believe is
the minimum membership level necessary for stabilized utilization.
These are forward-looking statements. See "Forward-Looking Information"
above for a description of risk factors that may affect medical expenses
per member and the medical loss ratio.
Administrative expenses as a percentage of revenue ("administrative
expense ratio") remained essentially flat at 10.5 percent for the first
quarter of 1996 as compared to 10.4 percent for the same period in 1995.
Administrative expenses increased 24 percent, from $23.0 million to
$28.5 million for the first quarters of 1995 and 1996, respectively.
The stabilization of the administrative expense ratio reflects
management's continuing efforts to manage its expanded business through
automated processes and the effect of new sales and expansion area
employees hired at a slower rate in 1996 as opposed to 1995.<PAGE>
<PAGE> 10
Investment income increased $1.7 million or 124 percent primarily due to
significantly greater invested balances and an increase in realized
gains on sales of marketable equity securities.
The net margin rate decreased from 7.7 percent in the first quarter of
1995 to 4.4 percent in the current quarter. This decrease is primarily
due to increased medical expenses.
LIQUIDITY AND CAPITAL RESOURCES
The Company's business is not capital intensive and the majority of the
Company's expenses are payments to health care providers, which
generally vary in direct proportion to the health premium revenues
received by the Company. Although medical utilization rates vary by
season, the payments for such expenses lag behind cash inflow from
premiums because of the lag in provider billing procedures. In the
past, the Company's cash requirements have been met principally from
operating cash flow and it is anticipated that this source will continue
to be sufficient in the future.
Accounts receivable increased from $61.3 million at December 31, 1995 to
$82.2 million at March 31, 1996. This $20.9 million increase was
primarily due to the significant increase in membership during the first
quarter of 1996 and increased receivables from groups with alternative
funding arrangements (i.e., revenues vary in a more direct manner with
medical expense) combined with a lower than normal balance in
receivables at December 31, 1995 due to a higher volume of payments made
by employer groups during the last month of the year.
Accounts payable increased from $15.1 million at December 31, 1995 to
$26.1 million at March 31, 1996 primarily due to routine accruals for
payroll related liabilities and accrued broker settlements relating to
the stock repurchase program. Medical claims payable increased from
$108.5 million at December 31, 1995 to $126.7 million at March 31, 1996
primarily due to increased member utilization and related claims
accruals and also a claims payment backlog which resulted from the
implementation of a new imaging system for claim adjudication, storage
and retrieval functions. Subsequent to March 31, the Company has been
able to process this unusual backlog and claim payment cycles are back
to normal levels.
Amounts recorded for treasury stock increased in 1996 by approximately
$22.5 million due to stock purchases under the Company's stock
repurchase program.
The Company has access to total revolving credit facilities of $10.0
million, which is used to provide short-term capital resources for
routine cash flow fluctuations. At March 31, 1996, approximately $1.5
million was drawn against the lines-of-credit and approximately $.5
million was outstanding in letters-of-credit.
Following is a schedule of the short-term capital resources available to
the Company (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995<PAGE>
------------ ------------
<S> <C> <C>
Cash and cash equivalents $ 8,503 $ 10,874
Short-term investments 210,601 204,734
Working capital advances to Maryland hospitals 4,053 4,053
----------- -----------
Total available liquid assets 223,157 219,661
Credit line availability 8,061 7,880
----------- -----------
Total short-term capital resources $ 231,218 $ 227,541
=========== ===========
/TABLE
<PAGE>
<PAGE> 11
The Company believes that the cash flow generated from operations along
with its current liquidity and borrowing capabilities are adequate for
both current and planned expanded operations. During the three months
ended March 31, 1996, MAMSI repurchased approximately 1 million shares
of its common stock for a total cost of approximately $22.5 million
under its stock repurchase program. Under this program, MAMSI may
currently expend up to $60 million (including brokerage commissions) to
repurchase shares of its common stock over a twelve month period. The
$24.00 maximum purchase price per share originally set by the MAMSI
Board of Directors was removed in April, 1996. This program will
continue to be financed through cash flow from the Company's operations.
Other capital expenditures will be made during 1996 to enhance the
Company's computer systems, to establish additional sales offices and to
make necessary improvements to existing administrative offices.<PAGE>
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
No material legal proceedings were commenced during the quarter ended
March 31, 1996 and no material developments occurred in any of the
previously disclosed proceedings during such quarter except as discussed
below:
MAMSI has reached an agreement in principle to settle the four class
action lawsuits pending in the U.S. District Court in Maryland against
MAMSI and certain directors and officers. These lawsuits were filed in
1995 on behalf of a class of all persons who purchased MAMSI common
stock from March 1, 1995 to June 15, 1995, and relate to the alleged
failure to disclose in a timely fashion the decision of the NCQA to deny
MAMSI accreditation. The four lawsuits were consolidated into a single
proceeding and the claim against the individual defendants alleging that
they had traded on the basis of material nonpublic information was
dropped at that time. The agreement provides for settlement of the
lawsuits for $3.75 million, a substantial portion of which will be
covered by insurance. It is subject to final documentation and approval
by the Court. The amount to be contributed by the Company to the
settlement will not be material to its financial condition or results of
operations.
The Company and the individuals named as defendants have denied all
allegations of wrongdoing made in the lawsuits but have elected to
settle the case to avoid the disruption, expense and uncertainty
associated with any litigation of this type.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
An annual meeting of the stockholders of MAMSI was held on April 15,
1996. The following matters were submitted to a vote of the
stockholders during the annual meeting:
(1) The following individuals were elected to the Board of Directors for
a three year term with the indicated votes:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
Francis C. Bruno, M.D. 31,112,888 395,654 None
Stanley M. Dahlman, Ph.D. 31,177,705 330,837 None
George T. Jochum 31,102,283 406,259 None
James A. Wild 31,195,651 312,891 None
/TABLE
<PAGE>
<PAGE> 13
Board members whose term of office continued after the meeting are as
follows:
John H. Cook, III, M.D.
Peter L. Flaherty, Jr., M.D.
Walter Girardin
Mark D. Groban, M.D.
Donald R. Hammett
Creighton R. Schneck
Stanley F. Smith, R.Ph.
Alfred Talamantes
(2) The adoption of the 1996 Non-Qualified Stock Option Plan was
ratified by a count of 14,257,966 affirmative votes, 7,073,846 negative
votes and 170,768 abstentions.
(3) The adoption of the 1996 Bonus Plan was ratified by a count of
19,637,633 affirmative votes, 1,661,149 negative votes and 203,798
abstentions.
There were 10,005,962 broker non-votes with respect to the adoption of
the 1996 Non-Qualified Stock Option Plan and the 1996 Bonus Plan.
ITEM 5. OTHER INFORMATION
In May, 1996, the MAMSI Board of Directors authorized an amendment to
MAMSI's bylaws to increase the size of the Board to 13 and unanimously
elected Thomas P. Barbera to fill the newly created vacancy. Mr.
Barbera was also elected the Vice Chairman of MAMSI immediately upon the
resignation of Peter L. Flaherty, Jr., M.D. from that position. Mr.
Flaherty will continue to serve as a member of the MAMSI Board of
Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See the Exhibit Index on page 15 of the Form 10-Q.
(b) There were no reports filed on Form 8-K during the quarter ended
March 31, 1996.<PAGE>
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by
undersigned thereto duly authorized.
MID ATLANTIC MEDICAL SERVICES, INC.
--------------------------------------------
(Registrant)
Date: May 14, 1996 Robert E. Foss
--------------------------------------------
Robert E. Foss
Executive Vice President and
Chief Financial Officer<PAGE>
<PAGE> 15
6(a) List of Exhibits.
EXHIBIT INDEX
Location of Exhibit
Exhibit in Sequential
Number Description of Document Numbering System
3.1 Amended and Restated By-laws of MAMSI as of
May 6, 1996. . . . . . . . . . . . . . . . . . .
10.78 1996 Management Bonus Program. . . . . . . . . . (1)
10.79 1996 Non-Qualified Stock Option Plan . . . . . . (1)
27.1 Financial Data Schedule for the Three
Months Ended March 31, 1996. . . . . . . . . . .
27.2 Amended Financial Data Schedule for the
Three Months Ended March 31, 1995. . . . . . . .
27.3 Amended Financial Data Schedule for the
Six Months Ended June 30, 1995 . . . . . . . . .
27.4 Amended Financial Data Schedule for the
Nine Months Ended September 30, 1995 . . . . . .
27.5 Amended Financial Data Schedule for the
Year Ended December 31, 1995 . . . . . . . . . .
------------
(1) Incorporated by reference to exhibits filed with the Company's
Annual Report filed under the Securities Exchange Act of 1934 on Form
10-K for the fiscal year ended December 31, 1995.<PAGE>
<PAGE>
<PAGE> 1
AMENDED AND RESTATED BY-LAWS
OF
MID ATLANTIC MEDICAL SERVICES, INC.
AS OF MAY 6, 1996
OFFICES
SECTION 1.1 PRINCIPAL OFFICE. - The principal office of the
corporation shall be at 4 Taft Court, Rockville, Maryland 20850. The
principal address of the corporation in Delaware is 229 South State
Street, Dover, Delaware 19901.
SECTION 1.2 OTHER OFFICES. - The corporation may have such other
offices and places of business within or without the State of Delaware
as the Board of Directors shall determine.
STOCKHOLDERS
SECTION 2.1 PLACE OF MEETINGS. - Meetings of the stockholders may
be held at such place or places within or without the State of Delaware
as shall be fixed by the Board of Directors and stated in the notice of
the meeting.
SECTION 2.2 ANNUAL MEETING. - An annual meeting of stockholders
for the election of directors and the transaction of such other business
as may properly come before the meeting shall be held within five months
after the close of the fiscal year of the corporation.
SECTION 2.3 SPECIAL MEETINGS. - Special meetings of the
stockholders for any purpose(s) may be called by the Board of Directors
or by the President stating the purpose(s) of the meeting. No matters,
except those set forth in the notice of special meeting, may be
considered at the special meeting.
SECTION 2.4 NOTICE OF MEETINGS. - Notice stating the time and
place, and in the case of a special meeting the purpose(s) thereof and
by whom called, shall be delivered to each stockholder entitled to vote,
not less than twenty-five (25) nor more than sixty (60) days prior to
the meeting. If mailed, notice shall be directed to each such
stockholder at his address as it appears on the records of the
stockholders of the corporation, unless he shall have previously filed
with the Secretary of the corporation a written request that notices
intended for him be mailed to some other address, in which case it shall
be mailed to the address designated in the request. Notice of any
meeting need not be given to any person who may become a stockholder of
record after the mailing of such notice and prior to the meeting, or to
any stockholder who attends such meeting, in person or by proxy, for
purposes other than solely to object to the lack of proper notice, or to
any stockholder who, in person or by proxy, submits a signed waiver of
notice either before or after such meeting. Notice of any adjourned
meeting of stockholders need not be given, unless otherwise required by
statute.
SECTION 2.5 QUORUM AND ACTION. - (a) At any duly held meeting of
stockholders, the presence in person or by proxy of stockholders
entitled to cast a majority of the votes thereat shall constitute a
quorum, except as otherwise provided by law or the Certificate of
Incorporation.<PAGE>
(b) A majority of the votes cast at a duly held meeting of
stockholders at which a quorum is present (stockholders represented by
proxy shall be deemed present), shall be sufficient to take or authorize
action upon any matter which may properly come before the meeting,
unless a greater vote, or voting by classes, is required by law or by
the Certificate of Incorporation or by these By-Laws on any question,
and except that in elections of directors, those receiving the greatest
number of votes shall be deemed elected even though not receiving a
majority.
Notwithstanding the above, at all meetings of the stockholders, any
vacancy in the Board of Directors by reason of an increase in the number
of directors, the resignation of a director, or for any other cause
other than the removal of a director by the stockholders, may be filled
only the affirmative vote of three-quarters (3/4) of the votes cast at
the meeting.<PAGE>
<PAGE> 2
SECTION 2.6 VOTING. - At each meeting of the stockholders, every
holder of stock then entitled to vote may vote in person or by proxy
and, except as may be otherwise provided by the Certificate of
Incorporation, shall have one vote for each share of stock registered in
his name. No proxy shall be valid after eleven (11) months from the
date of its execution, unless a longer period is provided for in the
proxy. Proxies shall be exhibited to the Secretary at the meeting and
filed with the records of the corporation.
SECTION 2.7 ADJOURNED MEETINGS. - Any duly called meeting of
stockholders may, by announcement thereat, be adjourned to a designated
time and place by the vote of the holders of a majority of the shares
present and entitled to vote thereat, even though less than a quorum is
so present. If a meeting is adjourned to another time, not more than
thirty days thereafter, and/or to another place, and if an announcement
of the adjourned time and/or place is made at the meeting, it shall not
be necessary to give notice of the adjourned meeting unless the Board of
Directors, after adjournment, fixes a new record date for the adjourned
meeting.
SECTION 2.8 ACTION BY WRITTEN CONSENT IN LIEU OF MEETING OF
STOCKHOLDERS. - See Section 6.6 of the By-Laws.
SECTION 2.9 NEW BUSINESS AND NOMINATIONS. - (a) Only such
business shall be conducted as shall have been brought before the
meeting (i) by or at the direction of the Board of Directors, or (ii) by
any stockholder of the corporation who is entitled to vote with respect
thereto and who complies with the notice procedures set forth in this
Section 2.9. For business to be properly brought before an annual
meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered or mailed to and received at the
principal executive offices of the corporation not less than thirty (30)
days prior to the date of the annual meeting; provided, however, that,
in the event that less than forty (40) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be received not later than
the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each
matter such stockholder proposes to bring before the annual meeting (i)
a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and address, as they appear on the
corporation's books, of the stockholder proposing such business, (iii)
the class and number of the corporation's capital stock that are
beneficially owned by such stockholder, and (iv) any material interest
of such stockholder in such business.
Notwithstanding anything in these Bylaws to the contrary, no
business shall be brought before or conducted at an annual meeting
except in accordance with the provisions of this Section 2.9(a). The
officer of the corporation or other person presiding over the annual
meeting shall, if the facts so warrant, determine and declare to the
meeting that business was not properly brought before the meeting in
accordance with the provisions of this Section 2.9(a) and, if he or she<PAGE>
should so determine, he or she shall so declare to the meeting and any
such business so determined to be not properly brought before the
meeting shall not be transacted. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of
stockholders of reports of officers, directors, and committees, but, in
connection with such reports, no new business shall be acted upon at
such annual meeting unless stated and filed as herein provided.
(b) At any special meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting by or
at the direction of the Board of Directors.<PAGE>
<PAGE> 3
(c) Only persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible for election as
directors. Nominations of persons for election to the Board of
Directors of the corporation may be made at a meeting of stockholders at
which directors are to be elected only (i) by or at the direction of the
Board of Directors, or (ii) by any stockholder of the corporation
entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 2.9(c).
Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made by timely notice in writing to the
Secretary of the corporation. To be timely, a stockholder's notice
shall be delivered or mailed to and received at the principal executive
offices of the corporation not less than thirty (30) days prior to the
date of the meeting; provided, however, that, in the event that less
than forty (40) days' notice or prior disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to
be timely must be so received not later than the close of business on
the tenth (10th) day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made.
Such stockholder's notice shall set forth (i) as to each person
whom such stockholder proposes to nominate for election or re-election
as a director, all information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (including such person's
written consent to being named in the proxy statement as a nominee and
to serving as a director if elected); and (ii) as to the stockholder
giving the notice (A) the name and address, as they appear on the
corporation's books, of such stockholder, and (B) the class and number
of shares of the corporation's capital stock that are beneficially owned
by such stockholder. At the request of the Board of Directors, any
person nominated by the Board of Directors for election as a director
shall furnish to the Secretary of the corporation the information
required to be set forth in a stockholder's notice of nomination that
pertains to the nominee.
No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the provisions of this
Section 2.9(c). The officer of the corporation or other person
presiding at the meeting shall, if the facts so warrant, determine that
a nomination was not made in accordance with such provisions and, if he
or she should so determine, he or she shall so declare to the meeting
and the defective nomination shall be disregarded.
DIRECTORS
SECTION 3.1 NUMBER AND QUALIFICATION. (a) The first Board of
Directors shall be comprised of twenty-three (23) directors who shall
serve a one-year term and until their successors are elected and
qualified at the first annual meeting. Thereafter, the number of
directors shall be set by the Board of Directors; provided, however,
that, except for the first Board, the Board of Directors shall be
comprised of no more than thirteen (13) and no less than five (5)
directors, each of whom shall serve a three-year staggered term and
until his or her successor is elected and qualified.
Notwithstanding the above, if the Board of Directors elects a<PAGE>
Chairman, pursuant to Sections 4.1 and 4.3 of the By-Laws, and/or a
President, pursuant to Sections 4.1 and 4.4 of these By-Laws, said
Chairman and/or President shall automatically become a director of the
corporation. The Chairman and/or President shall remain a director only
as long as he or she continues to be the Chairman and/or President of
the Corporation. As provided for in Section 4.1 of the By-Laws, the
Chairman and the President hold office at the pleasure of the Board, and
may be removed and/or replaced at any time, with or without cause.
(b) Upon the election qualification of the successor directors to
the first Board of Directors, the successor directors shall be elected
by the stockholders at the first stockholder meeting in members as
equally as possible, into three groups. Group A directors will have a
term of office expiring after one year and until the election and
qualification of their successors chosen at the next annual shareholders
meeting ensuing; Group B directors shall have a term of office expiring
one year thereafter and until the election and qualification of their
successors; Group C directors shall have a term of office expiring two
years thereafter and until the election and qualification of their
successors.<PAGE>
<PAGE> 4
(c) Each successor to a Group A, B, and C director shall hold
office until the third annual meeting of the stockholders next
succeeding his election, and until his successor is elected and
qualified, or until his prior death, resignation or removal; except
however, if additional directorships are established, the initial term
for such directorships shall be for one or more years not greater than
three as determined by the Board of Directors in order to ensure that
approximately one-third (1/3) of all the directors are elected at each
annual meeting of the stockholders.
(d) Notwithstanding the above, an individual is not qualified to
serve as a director if the individual is concurrently also a director of
M.D. Individual Practice Association, Inc., and Physicians Health Plan
of Maryland, Inc.
SECTION 3.2 POWERS. - The management of all the business, property
and affairs of the corporation shall be vested in the Board of
Directors. The Board may exercise all of the powers of the corporation
and do all lawful acts and things (including the adoption of such rules
and regulations for the conduct of its meetings, the exercise of its
powers, and the management of the corporation, as it may deem proper),
consistent with the Delaware General Corporation law, the Articles of
Incorporation, and these By-Laws, and not thereby conferred upon or
reserved to the stockholders.
SECTION 3.3 MEETINGS. - The annual meeting of the Board of
Directors may be held without notice within four (4) weeks after the
annual meeting of stockholders. Regular meetings and the time and place
of regular meetings of the Board may be established by the Board. If
the Board of Directors fixes a regular meeting at a time more than four
(4) weeks after the annual meeting of the stockholders, or changes the
time or place of any regular meeting, notice of such meeting, in
accordance with the By-Law requirements for notice of special meetings,
shall be given to each director who was not present at the meeting at
which such action was taken. Special meetings of the Board may be
called by the Chairman of the Board (if any) or the President, and shall
be called at the written request of three of more directors. Five (5)
days notice of special meetings shall be given by mail, or two (2) days
notice if given personally or by telegraph or cable, to each director.
Notice of special meetings need not state the purpose(s) thereof. A
majority of the Directors present at the time and place of any regular
or special meeting, although less than a quorum, may adjourn the same
from time to time without notice, until a quorum shall be present.
Notice of any special meeting shall not be required to be given to any
director who shall attend a meeting without protesting prior thereto or
at its commencement the lack of notice to him, or who submits a signed
waiver of notice, whether before or after the meeting. Notice of any
adjourned meeting shall be required to be given. Meetings of the Board
may be held at any place within or outside of the State of Delaware.
A director may attend a meeting of the Board of Directors, or any
committee thereof, either in person or by means of a telephone or
similar communications medium which allows all persons participating in
the meeting to hear and be heard by all others participating, and
participation pursuant to this subsection shall constitute presence in
person at the meeting.
SECTION 3.4 QUORUM AND ACTION. - A majority of the directors then<PAGE>
serving (but in no event less than one-third of the total number of
directors which the corporation would then have if there were no
vacancies) shall constitute a quorum for the transaction of business.
At any duly held meeting at which a quorum is present, the affirmative
vote of a majority of the directors present shall be the act of the
Board of Directors on any question, except where the act of a greater
number is required by these By-Laws, by the Certificate of
Incorporation, or by statute.
SECTION 3.5 ACTION BY WRITTEN CONSENT IN LIEU OF MEETINGS OF
DIRECTORS. - See Section 6.6 of these By-Laws.
SECTION 3.6 VACANCIES; REMOVAL. - (a) Any vacancy occurring in
the Board of Directors by reason of an increase in the number of
directors comprising the Board or for any other reason shall be filled
by action of a majority of the remaining directors, even if less than a
quorum, or by the sole remaining director. Vacancies shall be filled
for the unexpired portion of the term of the director whose vacancy is
being filled.<PAGE>
<PAGE> 5
(b) Except where the Certificate of Incorporation provides
otherwise, contains provisions authorizing cumulative voting or the
election of one or more directors by class or their election by holders
of bonds, or requires all action by stockholders to be by a greater
vote, any one or more of the directors may be removed, (1) either for or
without cause, at any time, by the holders of a majority of the shares
then entitled to vote at an election of directors (a) at any regular
meeting or (b) at any special meeting of the stockholders the notice of
which announces that a purpose of such meeting is to seek removal, or,
(2) for cause, by the affirmative vote of a majority of the entire Board
of Directors at any regular or special meeting of the Board. Three (3)
unexcused absences within one (1) calendar year from Board of Directors
meetings and/or committee meetings for committees on which such director
sits shall constitute cause for removal. The Chairman of the Board, if
a Chairman be elected, shall determine whether an absence is "excused"
for purposes of this paragraph, but this decision may be overruled by an
affirmative vote of a majority of the directors at any duly held meeting
at which a quorum is present. If no Chairman is then serving, the Board
members at any duly held meeting at which a quorum is present shall
determine whether an absence is excused.
SECTION 3.7 COMMITTEES. - The Board of Directors, by resolution
adopted by a majority of the entire Board (the total number of directors
which the Corporation would have if there were no vacancies), may
designate from its members an Executive Committee, and such other
committees as it shall choose to create, consisting of three or more
directors, with such powers and authority (to the extent permitted by
law) as may be provided in said resolution.
SECTION 3.8 REMUNERATION. - (a) Unless otherwise expressly
provided by resolution adopted by the Board of Directors, none of the
directors shall, as such, receive any stated remuneration for these
services but the Board of Directors may at any time and from time to
time by resolution provide that a specified sum shall be paid to a
director of the Corporation, either as his/her annual remuneration as
such director or member of any committee of the Board of Directors or as
remuneration for such directors attendance at each meeting of the Board
of Directors or any such committee. The Board of Directors may also
likewise provide that the Corporation shall reimburse each director for
any expenses paid by him/her on account of such attendance at any
meeting. Nothing in this section shall be construed to preclude any
director from serving the Corporation in any other capacity and
receiving remuneration thereof.
(b) Notwithstanding the above, if any director is also a director
of another corporation either directly or indirectly owned, controlled
by and/or under common control of the corporation, such director shall
receive remuneration as a director from only one corporation. The
director shall be remunerated by the corporation for which he or she
would receive the greater remuneration.
OFFICERS
SECTION 4.1 EXECUTIVE OFFICERS. - The executive officers of the
corporation shall be a President, a Treasurer and a Secretary, all of
whom shall be elected at its annual meeting by the Board, and shall hold
office at the pleasure of the Board. In addition, the Board may elect a
Chairman of the Board of Directors and one or more Vice-Presidents,<PAGE>
Assistant Secretaries and/or Assistant Treasurers. Any two or more
offices may be held by one person. All vacancies occurring among any of
the officers shall be filled by the Board for the unexpired portion of
the officer's term and may be filled at a meeting of the Board other
than its annual meeting. Any officer may be removed and/or replaced at
any time, with or without cause, by the affirmative vote of a majority
(unless the Certificate of Incorporation requires a larger vote) of the
directors present at a regular meeting of directors or at a special
meeting of directors called for the purpose.
SECTION 4.2 OTHER OFFICERS. - The Board may appoint, remove and
replace such other officers, including assistant officers and agents,
with such powers and duties as it shall deem necessary. The Board may
by resolution authorize the President to appoint and remove officers
which are not Executive Officers.<PAGE>
<PAGE> 6
SECTION 4.3 THE CHAIRMAN OF THE BOARD. - The Chairman of the Board
of Directors, if one be elected, shall preside at all meetings of the
Board of Directors and of the stockholders if the directors so resolve.
The Vice Chairman of the Board of Directors, if one be elected, shall
preside at all meetings of the Board of Directors and of the
stockholders in the absence of the Chairman. The Chairman and Vice
Chairman shall have and perform such other duties as from time to time
may be assigned to them by the Board of Directors or the Executive
Committee, if any.
SECTION 4.4 THE PRESIDENT. - The President shall, in the absence
or non-election of a Chairman of the Board, preside at all meetings of
the stockholders and directors. When the Board is not in session, he
shall have general management and control of the business and affairs of
the corporation.
SECTION 4.5 THE VICE-PRESIDENT. - The Vice-President, if any, or
if there be more than one, the senior Vice-President as determined by
the Board of Directors, shall in the absence or disability of the
President, exercise the powers and perform the duties of the President,
and each Vice-President shall exercise such other powers and perform
such other duties as shall be prescribed by the Board.
SECTION 4.6 THE TREASURER. - The Treasurer shall have custody of
all funds, securities and evidences of indebtedness of the corporation;
he shall receive and give receipts and acquittances for monies paid in
on account of the corporation, and shall pay out of the funds on hand
all bills, payrolls, and other just debts of the corporation, of
whatever nature, upon maturity; he shall enter regularly in books to be
kept by him for that purpose, full and accurate accounts of all monies
received and paid out by him on account of the corporation, and he shall
perform all other duties incident to the office of Treasurer and as may
be prescribed by the Board.
SECTION 4.7 THE SECRETARY. - The Secretary shall keep the minutes
of all proceedings of the Board of Directors and of the stockholders; he
shall attend to the giving and serving of all notices to the
stockholders and directors or other notice required by law, or by these
By-Laws; shall affix the seal of the corporation to deeds, contracts and
other instruments in writing requiring a seal, when duly signed or when
so ordered by the Board of Directors; shall have charge of the
certificate books and stock books and such other books and papers as the
Board may direct, and shall perform all other duties incident to the
office of the Secretary.
SECTION 4.8 SALARIES. - The salaries of all officers shall be
fixed by the Board of Directors, and the Board has the authority by
majority vote to reimburse expenses and to establish reasonable
compensation of all directors for services to the corporation as
directors, officers, or otherwise.
SECTION 4.9 SHARES OF OTHER CORPORATIONS. - Whenever the
corporation is the holder of shares of stock of any other corporation,
any right or power of the corporation as such stockholder (including the
attendance, acting and voting at stockholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on
behalf of the corporation by the President or such other person as the
Board of Directors may authorize.<PAGE>
CAPITAL STOCK
SECTION 5.1 FORM AND EXECUTION OF CERTIFICATES. - The shares of
the corporation shall be represented by certificates which shall be in
the form required by the laws of Delaware and as shall be adopted by the
Board of Directors. They shall be numbered and registered in the order
issued; shall be signed by the Chairman, the Vice-Chairman, the
President or a Vice-President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer, and shall be
sealed with the corporate seal or a facsimile thereof. When such a
certificate is counter-signed by a transfer agent or registered by a
registrar, the signatures of any such officers may be facsimile.
SECTION 5.2 TRANSFER. - Upon compliance with provisions restricting
the transfer or registration of transfer of shares of stock, if any,
transfer of shares shall be made upon the books of the corporation by
the registered holder in person or by attorney, duly authorized, but
only upon surrender of the certificate or certificates for such shares
properly assigned for transfer.<PAGE>
<PAGE> 7
SECTION 5.3 LOST OR DESTROYED CERTIFICATES. - The holder of any
certificate representing shares of stock of the corporation may notify
the corporation of any loss, theft or destruction thereof, and the Board
of Directors may thereupon, in its discretion, cause a new certificate
for the same number of shares to be issued to such holder upon
satisfactory proof of such loss, theft or destruction, and the deposit
of indemnity by way of bond or otherwise, in such form and amount and
with such surety or sureties as the Board may require, to indemnify the
corporation against loss or liability by reason of the issuance of such
new certificate.
SECTION 5.4 RECORD DATE. - (a) In order to make a determination
of stockholders for any proper purpose, the directors may close the
stock transfer books for a stated period not to exceed twenty (20) days;
and if the purpose of the closing is to determine stockholders entitled
to notice of or to vote at a meeting of the stockholders, the books
shall be closed for at least ten (10) days immediately preceding such
meeting.
(b) In lieu of closing the books, the directors may fix in advance
a record date for determination of stockholders for any proper purpose,
such date shall not be more than sixty (60) days, and in case of a
meeting of stockholders, not less than twenty-five (25) days, prior to
the date on which the particular action, requiring such determination of
stockholders, is to be taken.
(c) In the absence of such closing or fixed record date, the date
for determination of stockholders entitled (1) to notice of or to vote
at a meeting of stockholders, or (2) to receive a dividend or any right
shall be as provided by Section 213 of the General Corporation Law or
any successor provision.
MISCELLANEOUS
SECTION 6.1 DIVIDENDS. - The Board of Directors may declare
dividends from time to time on the outstanding shares of the corporation
from the surplus or net profits legally available therefor.
SECTION 6.2 SEAL. - The Board shall provide a suitable corporate
seal stating the corporate name, and state and year of incorporation,
which shall be in the charge of the Secretary and shall be used as
authorized by these By-Laws.
SECTION 6.3 FISCAL YEAR. - The fiscal year of the corporation
shall close annually on December 31.
SECTION 6.4 CHECKS, NOTES, ETC. - (a) Checks, notes, drafts,
bills of exchange and orders for the payment of money shall be signed or
endorsed in such manner as shall be determined by the Board.
(b) The funds of the corporation shall be deposited in such bank or
trust company, and checks drawn against such funds shall be signed in
such manner as may be determined from time to time by the Board.
SECTION 6.5 NOTICE AND WAIVER OF NOTICE. - (a) Any notice of
meetings required to be given under these By-Laws to stockholders and/or
directors may be waived in writing signed by the person or persons
entitled to such notice, whether before or after the time stated
therein.<PAGE>
(b) All notices required by these By-Laws shall be printed or
written, and shall be delivered either personally, by telegraph or
cable, or by mail, and, if mailed, shall be deemed to be delivered when
deposited in the United States mail, postage prepaid, addressed to the
stockholder or director at his address as it appears on the records of
the corporation.
SECTION 6.6 ACTION BY WRITTEN CONSENT IN LIEU OF MEETINGS. - Any
action required or permitted to be taken at a meeting of the
stockholders or of the Board of Directors or of any committee thereof
may be taken without a meeting if a consent in writing setting forth the
action so taken shall be signed by all of the stockholders entitled to
notice of or to vote with respect to the subject matter thereof, or by
all of the members of the Board or of such committee, as the case may
be, and such consent shall have the same force and effect as a unanimous
vote.<PAGE>
<PAGE> 8
AMENDMENTS
SECTION 7.1 AMENDMENTS. - These By-Laws may be altered, amended or
repealed:
(a) at any duly held stockholders' meeting by vote of the owners of
a majority (unless the Certificate of Incorporation requires a larger
vote) of the outstanding stock having voting power, present in person or
by proxy, provided notice of the amendment is included in the notice or
waiver of notice of such meeting, and
(b) except as provided below, at any regular or special meeting of
the Board of Directors by a majority (unless the Certificate of
Incorporation requires a larger vote) of the entire Board, but any By-
Laws so made by the Board may be altered or repealed by the
stockholders. The Board of Directors shall have no power to change the
quorum for meetings of stockholders or of the Board of Directors, or to
change any provisions of the By-Laws with respect to the removal of
directors or the filling of vacancies in the Board resulting from the
removal by the stockholders. If any By-Laws regulating an impending
election of directors are adopted, amended or repealed by the Board of
Directors, there shall be set forth in the notice of the next meeting of
stockholders for the election of directors, the by-laws so adopted,
amended or repealed, together with a concise statement of the changes
made.
INDEMNITY
SECTION 8.1 INDEMNITY. - The corporation shall indemnify its
officers, directors, employees and agents to the full extent permitted
by Section 145, or any successor provision, of the General Corporation
Law, and such rights of indemnification shall be in addition to any
rights to which any such director, officer, employee or agent may
otherwise be entitled under the Certificate of Incorporation, any
agreement or vote of the stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office, and shall continue as to
a person who has agreed to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of
such person.<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> $8,503
<SECURITIES> 210,601
<RECEIVABLES> 82,202
<ALLOWANCES> 3,831
<INVENTORY> 0
<CURRENT-ASSETS> 313,218
<PP&E> 41,618
<DEPRECIATION> 16,479
<TOTAL-ASSETS> $377,611
<CURRENT-LIABILITIES> $165,154
<BONDS> 181
0
0
<COMMON> 471
<OTHER-SE> 211,580
<TOTAL-LIABILITY-AND-EQUITY> $377,611
<SALES> $0
<TOTAL-REVENUES> 271,795
<CGS> 0
<TOTAL-COSTS> 224,314
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 193
<INTEREST-EXPENSE> 251
<INCOME-PRETAX> 19,030
<INCOME-TAX> 7,161
<INCOME-CONTINUING> 11,869
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $11,869
<EPS-PRIMARY> $.25
<EPS-DILUTED> $.25
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> $5,240
<SECURITIES> 152,243
<RECEIVABLES> 55,242
<ALLOWANCES> 3,614
<INVENTORY> 0
<CURRENT-ASSETS> 232,109
<PP&E> 33,808
<DEPRECIATION> 10,803
<TOTAL-ASSETS> $288,365
<CURRENT-LIABILITIES> $118,989
<BONDS> 5,186
0
0
<COMMON> 458
<OTHER-SE> 162,426
<TOTAL-LIABILITY-AND-EQUITY> $288,365
<SALES> $0
<TOTAL-REVENUES> 220,988
<CGS> 0
<TOTAL-COSTS> 170,713
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 23
<INTEREST-EXPENSE> 317
<INCOME-PRETAX> 27,264
<INCOME-TAX> 10,346
<INCOME-CONTINUING> 16,918
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $16,918
<EPS-PRIMARY> $.36
<EPS-DILUTED> $.36
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED JUNE 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> $8,866
<SECURITIES> 170,356
<RECEIVABLES> 57,883
<ALLOWANCES> 3,617
<INVENTORY> 0
<CURRENT-ASSETS> 256,112
<PP&E> 35,389
<DEPRECIATION> 12,368
<TOTAL-ASSETS> $313,690
<CURRENT-LIABILITIES> $125,286
<BONDS> 5,150
0
0
<COMMON> 463
<OTHER-SE> 181,705
<TOTAL-LIABILITY-AND-EQUITY> $313,690
<SALES> $0
<TOTAL-REVENUES> 456,504
<CGS> 0
<TOTAL-COSTS> 359,263
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 26
<INTEREST-EXPENSE> 542
<INCOME-PRETAX> 49,304
<INCOME-TAX> 18,561
<INCOME-CONTINUING> 30,743
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $30,743
<EPS-PRIMARY> $.65
<EPS-DILUTED> $.65
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED SEPTEMBER 30,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> $13,379
<SECURITIES> 187,394
<RECEIVABLES> 56,101
<ALLOWANCES> 3,607
<INVENTORY> 0
<CURRENT-ASSETS> 273,210
<PP&E> 37,196
<DEPRECIATION> 13,638
<TOTAL-ASSETS> $332,817
<CURRENT-LIABILITIES> $131,377
<BONDS> 211
0
0
<COMMON> 465
<OTHER-SE> 199,910
<TOTAL-LIABILITY-AND-EQUITY> $332,817
<SALES> $0
<TOTAL-REVENUES> 699,784
<CGS> 0
<TOTAL-COSTS> 553,251
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 16
<INTEREST-EXPENSE> 910
<INCOME-PRETAX> 72,496
<INCOME-TAX> 27,354
<INCOME-CONTINUING> 45,142
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $45,142
<EPS-PRIMARY> $.95
<EPS-DILUTED> $.95
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> $10,874
<SECURITIES> 204,734
<RECEIVABLES> 61,263
<ALLOWANCES> 3,638
<INVENTORY> 0
<CURRENT-ASSETS> 290,224
<PP&E> 38,704
<DEPRECIATION> 15,091
<TOTAL-ASSETS> $354,182
<CURRENT-LIABILITIES> $136,556
<BONDS> 194
0
0
<COMMON> 466
<OTHER-SE> 216,750
<TOTAL-LIABILITY-AND-EQUITY> $354,182
<SALES> $0
<TOTAL-REVENUES> 955,395
<CGS> 0
<TOTAL-COSTS> 758,245
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 47
<INTEREST-EXPENSE> 1,010
<INCOME-PRETAX> 96,340
<INCOME-TAX> 35,216
<INCOME-CONTINUING> 61,124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $61,124
<EPS-PRIMARY> $1.28
<EPS-DILUTED> $1.28
</TABLE>
